1.6 Business Ethics

Question 1

what is corporate social responsibility?

Answer 1

the idea that businesses are not just there to make money but also have wider ethical responsibilities to all stakeholders and their wider communities

Question 2

what is Friedman’s challenge to CSR?

Answer 2

• argued a company cannot have responsibilities, only people can
• the company can choose to spend their money benefitting the community but it is not their responsibility
• he argued that if we want businesses to benefit society then this involves and acceptance of socialism not capitalism

Question 3

what are three arguements that CSR is necessary?

Answer 3

• good ethics is good business as argued by Adam Smith
• a Kantian sense of duty
• a religious sense of reponsibility in how we treat humans and God’s creation

Question 4

what is a way that the CSR of companies can be measured?

Answer 4

• through the FTSE4Good index
• it gives companies an ESG (environmental, social and governance) rating
• this includes things like labour standards, water use and anti-corruption

Question 5

what is the principle of ‘good ethics as good business’

Answer 5

• initially proposed by the father of capitalism, Adam Smith
• his approach is esentially utilitarian
• although it may benefit us in the short term to overcharge customers it will ultimately harm our reputation and make less money overall
• even if bad ethical practices are done in secret there is always the risk of it being discovered
• when we provide good service to others we do it out of self interest knowing we will benefit in the end

Question 6

what is Kant’s view on good ethics as good business?

Answer 6

• good ethics and doing our duty is more important than good business
• the example of the shopkeeper who always charges fairly because it is good for business is not enough to count as morally good
• the shopkeeper is only morally good if he charges people faily out of duty

Question 7

what is a view to support Kant’s on good ethics as good business?

Answer 7

• Robert Solomon, 20th century modern American ethicist
• argued it is not possible to divide business from the rest of life
• too often people’s behaviour in their business lives bears no relation to how they act outside of work
• this should not be the case

Question 8

what is whistleblowing?

Answer 8

when an employee acts in the public interest to alert the employer or the public to wrongdoing within the organisation

Question 9

what are the two types of whistleblowing?

Answer 9

• private: internally within the company
• public: outside of the organisation such as the media or the police

Question 10

what are the costs of whistleblowing?

Answer 10

• they can face retaliation from colleagues, legal action and can even lose their jobs and future earnings
• the 2015 ‘freedom to speak out’ report into NHS whistleblowing found that 30% of whistleblowers felt unsafe and some had contemplated suicide

Question 11

what is a Kantian approach to whistleblowing?

Answer 11

• one must carry out one’s duty as an employee
• there are occasions when wider duties to the community may override these
• it is challenging to implement as duties may sometimes clash

Question 11

what are the benefits of whistleblowing?

Answer 11

• ensures companies take their CSR seriously, knowing their may be repercussions if they behave unethically
• also encourages integrity from employees

Question 12

what is a utilitarian approach to whistleblowing?

Answer 12

• whistleblowers have to make calculations about the greater good or harm that may come from choosing to speak out or to remain silent

Question 13

what is globalisation?

Answer 13

the integration of economies, industries, markets, cultures and policy-making around the world
essentially the world getting smaller
we are more connected technologically, politically and culturally

Question 14

what are positives of outsourcing labour?

Answer 14

in developing countries, econonmic growth has been achieved as these countries are economically competitive

Question 15

what are the downsides of outsourcing labour?

Answer 15

• loss of jobs in developed countries as labour can be found more cheaply elsewhere
• possible exploitation of cheap labour and poor conditions

Question 16

what is a utilitarian approach to business ethics?

Answer 16

• would point to the benefits of globalisation as millions of people have been lifted out of poverty as a result of global trade
• the utilitarian does not have a clear notion of rights and would therefore be willing to compromise the wellbeing of a few to provide services to the many

Question 17

what would a kantian approach to globalisation be?

Answer 17

• concerned that globalisation may increase the exploitation of persons in developing countries
• may even see it as a form of neo-colonialism, leading to a loss of identity in developing countries

Question 18

what is a general utilitarian approach to business ethics?

Answer 18

• important to distinguish between an act and rule utilitarians approach
• a utilitarian approach is flexible as it is not deontological
• Bentham and Mill were against state intervention (e.g. harm principle) and very libertarian which links into their approach to business ethics

Question 19

what are some benefits and drawbacks of a utilitarian approach?

Answer 19

• gives lots of freedom that allows businesses to assess what’s best for themselves
• society does the best when lots of individuals flourish as opposed to having rigorous rules imposed by the government
• it depersonalises issues that can lead to forfeiting the needs of the individual

Question 20

what is a general Kantian approach to business ethics?

Answer 20

• massive emphasis on duty over profit
• requirement as treating people as ends is very powerful
• responsibilities seen as priority

Question 21

what are some benefits and drawbacks of kantian approach to business ethics?

Answer 21

• gives priority to rights over profits, is it sustainable to ignore profits?
• treating people as ends is good
• issues with the specificity of maxims when applying things
• what about when duties conflict e.g. in whistleblowing?

Question 22

case studies for good corporate social responsibility?

Answer 22

1. Cadbury building schools and parks for its workers
2. Patagonia and commitment to ethical clothing
3. Tony’s Chocolonely and ending chocolate slavery

Question 23

case studies for whistleblowing?

Answer 23

1. Erin Brockovich
2. Edward Snowden’s revelations about US intelligence
3. Chelsea Manning and the US army

Question 24

case studies for bad corporate social responsibility?

Answer 24

1. Rana Plaza Factory disaster in Bangladesh 2013
2. Trafigura
3. Volskwagen fitting its cars with devices that enabled it to pass an exhaust emissions test in 2014
4. the 2016 investigation by parliament in Sports Direct that found poor conditions for workers